London midday: Stocks maintain gains but FTSE set for worst week in 3 years
London stocks were still higher by midday on Friday, but gains were fairly muted as investors eyed the release of the latest US non-farm payrolls report.
The FTSE 100 was up 0.3% at 7,100.63, but still on course for its worst week in three years amid worries about a global slowdown and Brexit uncertainty.
Russ Mould, investment director at AJ Bell, noted that the scale of this week's FTSE decline is much worse than any other major global stock market index.
"The storm clouds are gathering around the world judging by the latest economic data. China, the eurozone, the US and the UK have all reported poor PMI data of late with particular weakness in manufacturing activity. One could easily deduce that we’re heading towards a global recession. Indeed, the UN last month warned that was a clear possibility in 2020," he said.
"Stock markets have been very jittery this year with big rallies and then sudden pullbacks. The economic outlook would suggest volatility is only going to increase on the markets.
"The UK’s economic prospects look particularly fragile judging by the latest set of data on services, construction and manufacturing. A reduction in workforce numbers looks possible in the coming months, possibly companies not replacing leavers. However, if life gets worse one could imagine actual job cuts would be next on the agenda."
Market participants will turn their attention to the payrolls report, unemployment rate and average earnings, all due at 1330 BST. Payrolls are expected to have risen by 145,000 in September, while the unemployment rate is forecast at 3.7% and average hourly earnings are expected to have pushed up 0.3%.
Joshua Mahony, senior market analyst at IG, said: "With growth fears driving a huge selloff in stocks, the US jobs report provides the one critical release traders will be watching out for as a driver of sentiment as we close out the week.
"With September clearly having exhibited worrying traits across the US economy, previous expectations of an impending rebound could be wide of the mark when the payrolls figure is released this afternoon."
In currency markets, the pound was flat against the dollar at 1.2336 and 0.1% lower versus the euro at 1.1240, with Brexit still very much in focus after the European Union said it was "open but not convinced" by Prime Minister Boris Johnson's new proposals.
David Cheetham, chief market analyst at XTB, said: "It’s widely believed that the latest proposals won’t fly as a final solution, but it is no doubt encouraging that they have at least been received and not dismissed out of hand. The latest reports suggest the PM has a week to revise the deal and it looks like Boris will now have to turn to plan B."
In equity markets, London Stock Exchange rose after Reuters reported that investors have told Hong Kong Exchanges and Clearing that any bid must contain more cash and be up to 20% higher to persuade them to engage. Reuters cited three shareholders and a banking source.
BP was in the green as the oil giant said chief executive Bob Dudley would step down next February after nine years at the helm and be replaced by Bernard Looney, who heads up the upstream operations.
Aerospace parts maker Meggitt advanced as it won a $48m US army contract to supply aerial weapons scoring systems.
AstraZeneca gained after the US Food and Drug Administration approved its Fasenra respiratory treatment for self-administration.
JD Sports was boosted by an initiation at 'outperform' at Exane, but Marks & Spencer was knocked lower by a downgrade to 'reduce' at HSBC.
Insurers Direct Line and Hastings were under pressure after the Financial Conduct Authority outlined a series of measures to address competition issues in the UK home and motor insurance market, pointing out that around 6 million customers are paying high prices and not getting a good deal.
Market Movers
FTSE 100 (UKX) 7,100.63 0.32%
FTSE 250 (MCX) 19,341.71 -0.03%
techMARK (TASX) 3,797.33 0.48%
FTSE 100 - Risers
Scottish Mortgage Inv Trust (SMT) 487.59p 2.22%
London Stock Exchange Group (LSE) 7,318.00p 2.09%
Experian (EXPN) 2,508.00p 2.03%
JD Sports Fashion (JD.) 749.10p 2.00%
Compass Group (CPG) 2,046.00p 1.74%
Ocado Group (OCDO) 1,269.50p 1.64%
Rightmove (RMV) 540.00p 1.58%
Melrose Industries (MRO) 190.00p 1.58%
Relx plc (REL) 1,848.50p 1.43%
Coca-Cola HBC AG (CDI) (CCH) 2,578.00p 1.42%
FTSE 100 - Fallers
Hargreaves Lansdown (HL.) 1,794.00p -1.89%
NMC Health (NMC) 2,501.00p -1.46%
Standard Chartered (STAN) 632.80p -1.31%
Next (NXT) 5,950.00p -1.29%
Imperial Brands (IMB) 1,817.00p -1.25%
Evraz (EVR) 416.90p -1.23%
Persimmon (PSN) 2,063.00p -1.15%
Glencore (GLEN) 225.45p -1.10%
Johnson Matthey (JMAT) 2,799.00p -1.10%
Smurfit Kappa Group (SKG) 2,308.00p -0.94%
FTSE 250 - Risers
Bakkavor Group (BAKK) 120.00p 3.99%
Aston Martin Lagonda Global Holdings (AML) 496.68p 3.48%
PureTech Health (PRTC) 249.00p 3.32%
Sanne Group (SNN) 518.00p 2.57%
Airtel Africa (AAF) 51.70p 2.48%
TI Fluid Systems (TIFS) 187.60p 2.18%
Dunelm Group (DNLM) 827.50p 1.66%
JPMorgan American Inv Trust (JAM) 462.55p 1.55%
Britvic (BVIC) 974.50p 1.46%
Micro Focus International (MCRO) 1,053.00p 1.35%
FTSE 250 - Fallers
Marks & Spencer Group (MKS) 170.92p -4.46%
CYBG (CYBG) 104.65p -3.55%
PPHE Hotel Group Ltd (PPH) 1,790.00p -2.72%
Sirius Minerals (SXX) 3.58p -2.51%
Restaurant Group (RTN) 125.88p -2.42%
Direct Line Insurance Group (DLG) 276.50p -2.37%
PayPoint (PAY) 880.01p -2.33%
Pagegroup (PAGE) 418.20p -2.06%
Vivo Energy (VVO) 114.40p -2.05%
Jupiter Fund Management (JUP) 321.00p -1.86%